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A Nonlinear Supply-Driven Input-Output Model

Authors :
Nooraddin Sharify
Source :
Prague Economic Papers. 27:494-502
Publication Year :
2018
Publisher :
Prague University of Economics and Business, 2018.

Abstract

One of the major limitations of the supply-driven input-output (I-O) Ghosh model concerns its linear production function. Using the I-O table, this paper replaces the linear production function with the Cobb-Douglas (CD) production function within the supply-driven model. The two models are compared both theoretically and empirically. Nonlinear production function, relative substitutability of primary factors, and variability of the proportion of intermediate inputs over product levels are the characteristics of the proposed model. The consideration of sectors' Solow residual as Total Factor Productivity (TFP) of sectors is yet another characteristics of the proposed model. The model is also plausible in value added and supply shock computations.

Details

ISSN :
2336730X and 12100455
Volume :
27
Database :
OpenAIRE
Journal :
Prague Economic Papers
Accession number :
edsair.doi...........9ba3010ff686cbe1fef17bcebbbb4f8c
Full Text :
https://doi.org/10.18267/j.pep.657